Sometimes I happen upon a website that teeters between genius and scam and the other day, I found another such example although this one goes that extra mile and picks up the “License To Print Money” award.

It’s called Swoopo and on first glance, it looks like just another common or garden auction site, except it’s claiming to sell big ticket electrical goods for a fraction of their High Street prices. PS3s, DSs, XBOX 360s are all going for £20 – £50. Wondering who was insane enough to flog gear for prices that Bloke In The Pub would baulk at, I had a closer look. Five minutes later, their business model became apparent.

Each item has a countdown timer and a price. When you bid for an item, the prices goes up by 7p and the timer, I think, goes up by 15 seconds. You can watch these auctions live and after 30 minutes of viewing, I didn’t see a single auction close. When a PS3 is about to go for £15.20 with 5 seconds to go, who wouldn’t bid another 7p on top of that?

But here’s the clever bit. Each bid costs you 50p.

So that PS3 I mentioned a moment ago that was going for £15.20? Well, there’s been a flurry of activity on that item and now, it’s going for £29.20, ie there’s been two hundred more bids. So without selling anything yet, the good people at Swoopo have just made £100. There’s one on there just now for £89.53. How many 7p’s is that? More to the point, how many 50p’s is that?

The answers are 1279 and £639.50.

So for a £299 piece of kit, they’ve made more than double that already from bids and there’s still the final selling price to take into account and they have dozens of such auctions on the go at the same time.

There’s one more question outstanding. Right at the start, I wondered who was insane enough to sell these items for these crazy prices? It’s them!